Correo Electrónico
DNINFOA - SIA
Bibliotecas
Convocatorias
Identidad U.N.
Publicado
Working Capital Management - corporate profitability relationship: A literature review
DOI:
https://doi.org/10.15446/innovar.v36n99.107695Palabras clave:
Corporate finance, Literature review, Profitability, Working Capital Management (en)Finanzas Corporativas, Revisión de literatura, Rentabilidad, Gestión de capital de trabajo (es)
Descargas
Working Capital Management (WCM) refers to the day-to-day financial decisions that provide the necessary liquidity for the operative activities of companies. A crescent interest for researchers in the WCM literature is motivated by its expected significant effect on corporate profitability; however, empirical evidence often diverges regards analysis strategies and findings reported. This document aims to identify, report and analyze publications regarding the WCM - profitability relationship. Eighty-one documents are selected from Scopus and Web of Science databases employing a boolean search for articles from 2017 to 2022 in English that disseminate its utilization by open access. An initial upward trend in publication volume is identified, primarily from European, Asian, and North-American journals. The most frequent proxies for dependent and independent variables are Return on Assets and Cash Conversion Cycle, respectively, while company size is the most used control variable. Panel data analysis with fixed-effects models is recurrent, having a negative and significant relationship between variables as the most frequent result. This literature review is limited to the precise criterion for eligibility and databases consulted. Future research could enrich the WCM literature by developing empirical evidence in unexplored countries and industries, considering the proxies and analysis techniques identified in this literature review to have comparable results.
Referencias
Abuhommous, A. (2017). The impact of offering trade credit on firms' profitability (Vol. 28). doi:10.1002/jcaf.22298
Afrifa, G., & Tingbani, I. (2018). Working capital management, cash flow and SMEs' performance. International Journal of Banking, Accounting and Finance, 9(1), 19-43. doi:10.1504/IJBAAF.2018.089421
Ahangar, N. (2020). Working capital efficiency and firm profitability: Narrative literature review. Library Philosophy and Practice (e-journal), 3811.
Akbar, M., Akbar, A., & Draz, M. (2021). Global Financial Crisis, Working Capital Management, and Firm Performance: Evidence From an Islamic Market Index. SAGE Open, 11(2). doi:10.1177/21582440211015705
Aktas, N., Croci, E., & Petmezas, D. (2 de 2015). Is working capital management value-enhancing? Evidence from firm performance and investments. Journal of Corporate Finance, 30, 98-113. doi:10.1016/j.jcorpfin.2014.12.008
Ali, A. (2021a). Liquidity variations and variability cohesiveness with revenue and profitability: A case of saudi energy sector companies. Accounting, 7(4), 763-770. doi:10.5267/j.ac.2021.2.008
Ali, A. (2021b). Supply chain performance, profitability and liquidity: An analytical study of indian pharmaceutical sector. Accounting, 7(6), 1479-1490. doi:10.5267/j.ac.2021.3.016
Ali, M., Hussin, N., & Ghani, E. (2019). Liquidity, growth and profitability of non-financial public listed Malaysia: A Malaysian evidence. International Journal of Financial Research, 10(3), 194-202. doi:10.5430/ijfr.v10n3p194
Anton, S. G., & Afloarei Nucu, A. E. (2021). The impact of working capital management on firm profitability: Empirical evidence from the Polish listed firms. Journal of risk financial management, 14(1), 9. doi:10.3390/jrfm14010009
Ayoush, M., Toumeh, A., & Shabaneh, K. (2021). Liquidity, leverage, and solvency: what affects profitability of industrial enterprises the most? Investment Management and Financial Innovations, 18(3), 249-259. doi:10.21511/imfi.18(3).2021.22
Baig, U., Sarwat, S., & Godil, D. (2021). Relationship of working capital management and profitability of the firms-an application of unit root and co-integration test on the various corporate sectors of Pakistan stock exchange. Independent Journal of Management Production, 12(1), 377-394.
Baños-Caballero, S., García-Teruel, P., & Martínez-Solano, P. (9 de 2012). How does working capital management affect the profitability of Spanish SMEs? (Vol. 39). doi:10.1007/s11187-011-9317-8
Baños-Caballero, S., García-Teruel, P., & Martínez-Solano, P. (2014). Working capital management, corporate performance, and financial constraints. Journal of business research, 67(3), 332-338. doi:10.1016/j.jbusres.2013.01.016
Basyith, A., Djazuli, A., & Fauzi, F. (2021). Does working capital management affect profitability? Empirical evidence from Indonesia listed firms. Asian Economic and Financial Review, 11(3), 236-251. doi:10.18488/journal.aefr.2021.113.236.251
Batrancea, L. (2021). The influence of liquidity and solvency on performance within the healthcare industry: Evidence from publicly listed companies. Mathematics, 9(18). doi:10.3390/math9182231
Ben-Nasr, H. (12 de 2016). State and foreign ownership and the value of working capital management. Journal of Corporate Finance, 41, 217-240. doi:10.1016/j.jcorpfin.2016.09.002
Boțoc, C., & Anton, S. (2017). Is profitability driven by working capital management? evidence for high-growth firms from emerging Europe. Journal of Business Economics and Management, 18(6), 1135-1155. doi:10.3846/16111699.2017.1402362
Braimah, A., Mu, Y., Quaye, I., & Ibrahim, A. (2021). Working Capital Management and SMEs Profitability in Emerging Economies: The Ghanaian Case. SAGE Open, 11(1). doi:10.1177/2158244021989317
Čavlin, M., Tankosić, J., Miletić, V., & Ivaniš, M. (2021). Analysis of the impact of liquidity on the profitability in the medium and large meat processing enterprises in the Republic of Serbia. Economics of Agriculture, 68(3), 789-803. doi:10.5937/ekoPolj2103789C
Ceylan, I. (2021). Does Cash Conversion Cycle Affect Firm Profitability? Evidence from the Listed Small and Medium-Sized Enterprises. Eskişehir Osmangazi Üniversitesi İİBF Dergisi, Journal of Economics and Administrative Sciences, 16(1), 110-123. doi:10.17153/oguiibf.853862
Dalci, I., Tanova, C., Ozyapici, H., & Bein, M. (2019). The moderating impact of firm size on the relationship between working capital management and profitability. Prague Economic Papers, 28(3), 296-312. doi:10.18267/j.pep.681
Daryanto, W., Samidi, S., & Siregar, D. (2018). The impact of financial liquidity and leverage on financial performance: Evidence from property and real estate enterprises in Indonesia. Management Science Letters, 8(12), 1345-1352. doi:10.5267/j.msl.2018.9.005
Dave, A., Parwani, A., Dave, T., & Joshi, A. (2019). Cash Conversion Cycle and Profitability of Textile Companies: Evidences from India. International Journal of Engineering and Advanced Technology, 8(6S2), 1098-1102. doi:10.35940/ijeat.F1325.0886S219
Deloof, M. (2003). Does working capital management affect profitability of Belgian firms? 30(3‐4), 573-588. doi:10.1111/1468-5957.00008
Eljelly, A. (2004). Liquidity‐profitability tradeoff: An empirical investigation in an emerging market. International journal of commerce management. doi:10.1108/10569210480000179
Gallegos Mardones, J. (2021). Working capital management and business performance: evidence from Latin American companies. Economic Research-Ekonomska Istrazivanja. doi:10.1080/1331677X.2021.1986675
García‐Teruel, P., & Martínez‐Solano, P. (2007). Effects of working capital management on SME profitability. International Journal of managerial finance Accounting. doi:10.1108/17439130710738718
Gill, A., Biger, N., & Mathur, N. (2010). The relationship between working capital management and profitability: Evidence from the United States. Business economics journal, 10(1), 1-9.
Gołaś, Z. (2020). Impact of working capital management on business profitability: Evidence from the polish dairy industr. Agricultural Economics (Czech Republic), 66(6), 278-285. doi:10.17221/335/2019-AGRICECON
Gonçalves, T., Gaio, C., & Robles, F. (2018). The impact of working capital management on firm profitability in different economic cycles: Evidence from the United Kingdom. Economics and Business Letters, 7(2), 70-75. doi:10.17811/ebl.7.2.2018.70-75
Gorondutse, A., Ali, R., Abubakar, A., & Naalah, M. (2017). The effect of working capital management on SMEs profitability in Malaysia | Wpływ zarządzania kapitałem pracy na rentowność mśp w malezji. Polish Journal of Management Studies, 16(2), 99-109. doi:10.17512/pjms.2017.16.2.09
Hameer, N., Ramakrishnan, S., & Gillani, S. (2021). The impact of working capital management on firm performance across bumiputera and non bumiputera manufacturing firms in malaysia. Estudios de Economia Aplicada, 39(4). doi:10.25115/eea.v39i4.4585
Hausman, J. (1978). Specification Tests in Econometrics. Econometrica, 46, 1251-1271. doi:10.2307/1913827
Högerle, B., Charifzadeh, M., Ferencz, M., & Kostin, K. (2020). The development of working capital management and its impact on profitability and shareholder value: evidence from Germany. Strategic management, 25(2), 27-39. doi:10.5937/StraMan2002027H
Hussain, S., Hassan, A., Quddus, A., & Rafiq, M. (2021a). Cash conversion cycle sensitivity by moderating role of exchange rates volatility on firm’s financial performance. Business: Theory and Practice, 22(2), 277-289. doi:10.3846/btp.2021.13147
Hussain, S., Nguyen, V., Nguyen, Q., Nguyen, H., & Nguyen, T. (2021b). Macroeconomic factors, working capital management, and firm performance—A static and dynamic panel analysis. Humanities and Social Sciences Communications, 8(1). doi:10.1057/s41599-021-00778-x
Ismail, N., Mohamad, N., & Ramli, A. (2019). Liquidity and profitability of oil and gas industry in Malaysia. International Journal of Engineering and Advanced Technology, 9(1), 3603-3606. doi:10.35940/ijeat.A2696.109119
Jaworski, J., & Czerwonka, L. (2021). Meta-study on the relationship between profitability and liquidity of enterprises in macroeconomic and institutional environment. Decision, 48(2), 233–246. doi:10.1007/s40622-021-00280-y
Johnson, R. W., & Melicher, R. W. (2003). Administración Financiera. México: CECSA.
Kabuye, F., Kato, J., Akugizibwe, I., & Bugambiro, N. (2019). Internal control systems, working capital management and financial performance of supermarkets. Cogent Business and Management, 6(1), 1-18. doi:10.1080/23311975.2019.1573524
Kartikasary, M., Marsintauli, F., Sitinjak, M., Laurens, S., Novianti, E., & Situmorang, R. (2021). The effect of working capital management, fixed financial asset ratio, financial debt ratio on profitability in Indonesian consumer goods sector. Accounting, 7(3), 661-666. doi:10.5267/j.ac.2020.12.011
Kasozi, J. (2017). The effect of working capital management on profitability: A case of listed manufacturing firms in South Africa. Investment Management and Financial Innovations, 14(2), 336-346. doi:10.21511/imfi.14(2-2).2017.05
Kayani, U., De Silva, T., & Gan, C. (2019). A systematic literature review on working capital management - an identification of new avenues. Qualitative Research in Financial Markets, 11(3), 352-366. doi:10.1108/qrfm-05-2018-0062
Korent, D., & Orsag, S. (2018). The impact of working capital management on profitability of Croatian software companies. Zagreb International Review of Economics Business, 21(1), 47-65. doi:10.2478/zireb-2018-0007
Kowsari, A., & Shorvarzi, M. (2017). The relationship between working capital management, financial constraints and performance of listed companies in Tehran stock Exchange. Journal of Politics and Law, 10, 248. doi:10.5539/jpl.v10n2p248
Kusuma, H., & Bachtiar, A. (2018). Working Capital Management and Corporate Performance: Evidence from Indonesia. Journal of Management and Business Administration. Central Europe, 26(2), 76-88. doi:10.7206/jmba.ce.2450-7814.229
Lefebvre, V. (2020). Performance, working capital management, and the liability of smallness: A question of opportunity costs? Journal of Small Business Management, 60(3), 704-733. doi:10.1080/00472778.2020.1735252
Li, K., Musah, M., Kong, Y., Adjei Mensah, I., Antwi, S., Bawuah, J., . . . Andrew Osei, A. (2020). Liquidity and Firms’ Financial Performance Nexus: Panel Evidence From Non-Financial Firms Listed on the Ghana Stock Exchange. SAGE Open, 10(3). doi:10.1177/2158244020950363
Linh, N., & Mohanlingam, S. (2018). The effects of cash conversion cycle on profitability: An insight into the agriculture and food industries in Thailand. Asian Journal of Business Accounting, 11(1), 97-119. doi:10.22452/ajba.vol11no1.4
Loo, P.-Y., & Lau, W.-T. (2019). Key components of working capital management: Investment performance in malaysia. Management Science Letters, 9(12), 1955-1964. doi:10.5267/j.msl.2019.7.010
Lyngstadaas, H. (2020). Packages or systems? Working capital management and financial performance among listed U.S. manufacturing firms. Journal of Management Control, 31(4), 403-450. doi:10.1007/s00187-020-00306-z
Mazreku, I., Morina, F., & Zeqaj, F. (2020). Does working capital management affect the profitability of commercial banks: The case of kosovo. European Journal of Sustainable Development, 9(1), 126-140. doi:10.14207/ejsd.2020.v9n1p126
Morshed, A. (2020). Role of working capital management in profitability considering the connection between accounting and finance. Asian Journal of Accounting Research, 5(2), 257-267. doi:10.1108/AJAR-04-2020-0023
Nastiti, P., Atahau, A., & Supramono, S. (2019). Working capital management and its influence on profitability and sustainable growth. Business: Theory and Practice, 20, 61-68. doi:10.3846/BTP.2019.06
Nguyen, A., & Nguyen, T. (2018). Working capital management and corporate profitability: Empirical evidence from Vietnam. Foundations of Management, 10(1), 195-206. doi:10.2478/fman-2018-0015
Nguyen, A., Pham, H., & Nguyen, H. (2020). Impact of working capital management on firm's profitability: Empirical evidence from Vietnam. doi:10.13106/jafeb.2020.vol7.no3.115
Nguyen, C. (2020). Impact of working capital management on firm performance in different business cycles: Evidence from Vietnam. The Journal of Asian Finance, Economics Business, 7(12), 863-867. doi:10.13106/JAFEB.2020.VOL7.NO12.863
Nobanee, H. (2018). Efficiency of working capital management and profitability of uae construction companies: Size and crisis effects | Skuteczność zarządzania kapitałem obrotowym oraz rentowność firm budowlanych zea: Wielkość i efekty kryzysowe. Polish Journal of Management Studies, 18(2), 209-215. doi:10.17512/pjms.2018.18.2.17
Obeidat, M., Almomani, T., & Almomani, M. (2021). Analyzing the cash conversion cycle relationship with the financial performance of chemical firms: Evidence from Amman Stock Exchange. Accounting, 7(6), 1339-1346. doi:10.5267/j.ac.2021.4.004
Osho, O., Omankhanlen, A., Fasanmi, M., & Akinjare, V. (2021). Liquidity and the performance of the nigerian manufacturing firms: An economic value-added approach. WSEAS Transactions on Environment and Development, 17, 47-55. doi:10.37394/232015.2021.17.5
Otekunrin, A., Nwanji, T., Fagboro, D., Olowookere, J., & Adenike, O. (2021). Does working capital management impact an enterprise's profitability? Evidence from selected Nigerian firms. Problems and Perspectives in Management, 19(1), 477-486. doi:10.21511/ppm.19(1).2021.40
Othuon, D., Gatimbu, K., Musafiri, C., & Ngetich, F. (2021). Working capital management impacts on small-scale coffee wet mills' financial performance in eastern Kenya. Heliyon, 7(9). doi:10.1016/j.heliyon.2021.e07887
Page, M., McKenzie, J., Bossuyt, P., Boutron, I., Hoffmann, T., Mulrow, C., . . . Moher, D. (3 de 2021). The PRISMA 2020 statement: an updated guideline for reporting systematic reviews. doi:10.1136/bmj.n71
Perera, W., & Priyashantha, P. (2018). The impact of working capital management on shareholders’ wealth and profitability: Evidence from Colombo stock exchange. Investment Management and Financial Innovations, 15(2), 104-115. doi:10.21511/imfi.15(2).2018.10
Pham, K., Nguyen, Q., & Nguyen, C. (2020). Effect of working capital management on the profitability of steel companies on Vietnam stock exchanges. The Journal of Asian Finance, Economics Business, 7(10), 741-750. doi:10.13106/JAFEB.2020.VOL7.N10.741
Phuong, N., & Hung, D. (2020). Impact of working capital management on firm profitability: Empirical study in Vietnam. Accounting, 6(3), 259-266. doi:10.5267/j.ac.2020.3.001
Prasad, P., Narayanasamy, S., Paul, S., Chattopadhyay, S., & Saravanan, P. (2019). Review of literature on working capital management and future research agenda (Vol. 33). doi:doi.org/10.1111/joes.12299
Prempeh, K., & Peprah-Amankona, G. (2020). Does working capital management affect Profitability of Ghanaian manufacturing firms? Zagreb International Review of Economics & Business, 23(1 ), 1-18. doi:10.2478/zireb-2020-0001
Raheman, A., & Nasr, M. (2007). Working capital management and profitability–case of Pakistani firms. International review of business research papers, 3(1), 279-300.
Ramlan, H., Saad, N., Mohamad, N., & Haniff, M. (2019). Liquidity and energy firms' performance in Malaysia. Journal of Mechanics of Continua and Mathematical Sciences, 14(6), 938-944. doi:10.26782/jmcms.2019.12.00071
Raykov, E. (2017). The liquidity-profitability trade-off in Bulgaria in terms of the changed financial management functions during crisis | Kompromis između likvidnosti i profitabilnosti u bugarskoj i promjene funkcije financijskog menadžmenta tijekom krize. Management (Croatia), 22(1), 135-156. doi:10.30924/mjcmi/2017.22.1.135
Rey-Ares, L., Fernández-López, S., & Rodeiro-Pazos, D. (2021). Impact of working capital management on profitability for Spanish fish canning companies. Marine Policy, 130. doi:10.1016/j.marpol.2021.104583
Richards, V. D., & Laughlin, E. J. (1980). A Cash Conversion Cycle Approach to Liquidity Analysis. Financial Management, 9(1), 32-38. doi:10.2307/3665310
Roy, S., Misra, A., Padhan, P., & Rahman, M. (2019). Interrelationship among Liquidity, Regulatory Capital and Profitability- A Study on Indian Banks. Cogent Economics and Finance, 7(1). doi:10.1080/23322039.2019.1664845
Sameni, A., & Fakour, R. (2019). The effect of working capital management on financial performance and operational cash flows of companies accepted in tehran securities exchange. Humanities and Social Sciences Reviews, 7(6), 625-632. doi:10.18510/hssr.2019.7693
Scopus. (2021). Obtenido de https://www.scopus.com/
Shakatreh, M. (2021). The effect of liquidity ratios management on the profitability of industrial companies listed on the amman stock exchange. Accounting, 7(5), 1131-1138. doi:10.5267/j.ac.2021.2.026
Shin, H.-H., & Soenen, H. (1998). Efficiency of working capital and corporate profitability.
Simon, S., Sawandi, N., & Abdul-Hamid, M. (2017). The quadratic relationship between working capital management and firm performance: Evidence from the Nigerian economy. Journal of Business and Retail Management Research, 12(1), 94-108. doi:10.24052/jbrmr/v12is01/tqrbwcmafpeftne
Simon, S., Sawandi, N., & Abdul-Hamid, M. (2018). A reassessment of the relationship between working capital management and firm performance: Evidence from non-financial companies in Nigeria. Investment Management and Financial Innovations, 15(3), 249-266. doi:10.21511/imfi.15(3).2018.21
Singh, H., & Kumar, S. (2014). Working capital management: a literature review and research agenda. Qualitative Research in Financial Markets, 6(2), 173-197. doi:10.1108/QRFM-04-2013-0010
Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines (Vol. 104). doi:10.1016/j.jbusres.2019.07.039
Soukhakian, I., & Khodakarami, M. (2019). Working capital management, firm performance and macroeconomic factors: Evidence from Iran. Cogent Business and Management, 6(1). doi:10.1080/23311975.2019.1684227
Stock, J., & Watson, M. (2012). Introducción a la Econometría. Madrid: Pearson Educación.
Tingbani, I., Tauringana, V., Damoah, I., & Sha'ven, W. (2020). Working capital management and financial performance of UK listed firms: A contingency approach. International Journal of Banking, Accounting and Finance, 11(2), 173-201. doi:10.1504/IJBAAF.2020.106708
Vuković, B., & Jakšić, D. (2019). The effect of working capital management on profitability: evidence from southeast europe. Economics of Agriculture, 66(1), 159-172. doi:10.5937/ekoPolj1901159V
Wang, Y.-J. (2002). Liquidity management, operating performance, and corporate value: evidence from Japan and Taiwan. Journal of multinational financial management, 12(2), 159-169. doi:10.1016/S1042-444X(01)00047-0
Wang, Z., Akbar, M., & Akbar, A. (2020). The interplay between working capital management and a firm's financial performance across the corporate life cycle. doi:10.3390/su12041661
Wassie, F. (2021). Working Capital Management and Its Impact on Firms' Performance: An Empirical Analysis on Ethiopian Exporters. doi:10.1155/2021/6681572
Web of Science. (2021). Obtenido de http://www.webofscience.com
Yameen, M., Farhan, N., & Tabash, M. (2019). The impact of liquidity on firms’ performance: Empirical investigation from Indian pharmaceutical companies. doi:10.36941/ajis-2019-0019
Yousaf, M., & Bris, P. (2021). Effects of working capital management on firm performance: Evidence from the EFQM certified firms. Cogent Economics and Finance, 9(1). doi:10.1080/23322039.2021.1958504
Yousaf, M., Bris, P., & Haider, I. (2021). Working capital management and firm’s profitability: Evidence from Czech certified firms from the EFQM excellence model. Cogent Economics and Finance, 9(1). doi:10.1080/23322039.2021.1954318
Cómo citar
APA
ACM
ACS
ABNT
Chicago
Harvard
IEEE
MLA
Turabian
Vancouver
Descargar cita
Licencia
Derechos de autor 2026 Innovar
Esta obra está bajo una licencia internacional Creative Commons Atribución-NoComercial-SinDerivadas 4.0.
Todos los artículos publicados por Innovar se encuentran disponibles globalmente con acceso abierto y licenciados bajo los términos de Creative Commons Atribución-No_Comercial-Sin_Derivadas 4.0 Internacional (CC BY-NC-ND 4.0).
Una vez seleccionados los artículos para un número, y antes de iniciar la etapa de cuidado y producción editorial, los autores deben firmar una cesión de derechos patrimoniales de su obra. Innovar se ciñe a las normas colombianas en materia de derechos de autor.
El material de esta revista puede ser reproducido o citado con carácter académico, citando la fuente.
Esta obra está bajo una Licencia Creative Commons:
